Ladies and gentlemen, good day, and welcome to the HFCL Q1 FY 2027 Conference Call hosted by Nuvama Institutional Equities. Before we begin, I would like to read a disclaimer statement. Statements made during this call may be forward-looking in nature based on the management's current beliefs and expectations. This must be viewed in relation to the risks of the HFCL business basis that could cause its future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements. Investors are therefore requested to check the information independently before making any investment decision. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Achal Lohade from Nuvama Institutional Equities for the opening remarks. Thank you, and over to you, sir. Yes. Thank you. Good afternoon, everyone. On behalf of Nuvama Institutional Equities, we are glad to host the senior management of HFCL Limited. To discuss the Q1 FY2027 earnings, we have with us Mr. Mahendra Nahata, Promoter and Managing Director; Mr. V.R. Jain, CFO; Mr. Manoj Baid, Company Secretary; and Mr. Amit Agarwal, Head Investor Relations. We will start the call with the opening remarks from the management and then move to Q&A. Thank you, and over to Mr. Nahata. Good evening, everyone, ladies and gentlemen. I extend a warm welcome to all of you on HFCL's earnings conference call for the first quarter of financial year 2026/2027. I trust you have had the opportunity to review our financial results, press release, and investor presentation, which have been uploaded on the company's website, as well as on the website of the stock exchanges. Thank you for joining us today and for your continued interest in HFCL. With strategic initiatives undertaken by the company, HFCL today is on a strong growth path. I am pleased to inform you that your company has delivered remarkable performance during the first quarter of financial year 2027, its highest-ever quarterly revenue, profitability, and order book. We have emerged as a global player in optical fiber, optical fiber cables, and optical connectivity solutions; defense; aerospace; telecom products; and the digital infrastructure field. Each of these businesses addresses large and rapidly expanding markets, and together they provide HFCL with multiple avenues for sustainable and profitable growth. We are also encouraged by the increasing confidence shown by our customers, business partners, and the investment community. Over the last few quarters, several reputed domestic and global institutional investors have become shareholders of HFCL. We sincerely welcome their confidence in the company. We began financial year 2027 with clear priorities to accelerate growth, improve profitability, strengthen our technology leadership, and execute our long-term strategy with discipline. I am pleased to state that the first quarter has been an encouraging start in that direction. The quarter witnessed strong order inflows and execution across our core segments, continued improvement in profitability, and sustained progress on several strategic initiatives that we believe will shape HFCL's growth over the coming years. In our previous earnings call, we had outlined our aspiration for delivering around 20% revenue growth during FY 2027, supported by continued improvement in quality and mix of revenues. Based on the progress achieved in the first quarter, healthy order inflows, favorable industry dynamics, expanding global opportunities, and improving execution capabilities, we, to the best of our estimate, can raise our aspiration for FY 2027 to a revenue growth of 40% now. This confidence is not based on any single order or short-term opportunity. It is supported by multiple growth platforms that are gaining momentum simultaneously and providing greater visibility to our business. Another very important milestone during the quarter has been significant improvement in our profitability. During our previous earnings call, we had indicated our aspiration of achieving EBITDA margins of over 20% during FY 2027. I am pleased to share that the company has achieved an EBITDA margin of more than 23.25% in the very first quarter itself. More importantly, this reflects a structural enhancement in the quality of our business led by various initiatives taken by the company over the last few years. A higher contribution from technology-led products, increasing exports, improved product mix, operating leverage, and our continued focus on innovation are collectively driving stronger profitability. Our objective is not merely to grow revenues but to build a business that consistently delivers sustainable and profitable growth. Our confidence is further strengthened by the quality of the orders secured during the quarter. We secured several strategically important orders across our core businesses, reinforcing HFCL's position as a trusted technology partner in optical connectivity and digital infrastructure. Consequently, our order book has strengthened to approximately INR 26,665 crore, which is not only an all-time high but is 5x FY 2026 revenue, providing healthy revenue visibility and supporting our confidence in the growth outlook for the company. I am pleased to inform you that the global optical connectivity industry has entered a new phase of growth. The emergence of artificial intelligence, hyperscale data centers, cloud computing, and high-performance computing is creating an entirely new source of demand for advanced optical fiber infrastructure. These technologies require massive data movement at extremely high speeds, making optical fiber an indispensable part of the ecosystem. But telecom network expansion also remains as an important driver. Based on orders received and regular interactions with our customers, we can definitely foresee the demand pipeline continuing and the market growing for at least the next five years. In parallel, governments across the world are investing heavily in secure communication networks, strategic infrastructure, and offensive capabilities, creating additional demand from the defense and public infrastructure sectors. As a result, industry today is supported by multiple demand drivers, making the long-term outlook significantly stronger and more resilient than in earlier investment cycles. In anticipation of the significant opportunities emerging globally, we continue to strengthen our manufacturing capabilities. The expansion of our optical fiber manufacturing capacity from 28 million fiber kilometers to 34 million fiber kilometers is progressing well and will be completed by December 2026. Similarly, the expansion of our optical fiber cable manufacturing capacity from 34 million fiber kilometers to 43 million fiber kilometers, and expansion of infrastructure for data center connectivity solutions are also progressing as planned and are expected to be commissioned within targeted timelines. As you know, the board has already approved setting up a greenfield preform manufacturing facility of 300 metric tons per annum with a capital outlay of INR 580 crores as high-level backward integration for further strengthening our supply chain with incremental fiber manufacturing capacity. These capacity expansions have been aligned with the orders in hand and increasing global demand and will further strengthen our ability to serve customers across domestic and international markets. Friends, the data center interconnectivity business has created another large opportunity for our optical connectivity segment. With the construction of hyperscale data centers, demand for connectivity solutions is ever-increasing. With this increasing demand, we are continuously expanding our capacities for the manufacture of interconnect products for the data centers. The manufacturing capacities, including company subsidiary Keir Limited, are being expanded by 5x. Even in the first year of production, which is the current year, we expect a revenue of more than INR 700 crores with a clear visibility to increase it further multiplefold in subsequent years. I am pleased to inform you that based on global opportunities and inquiries for data center connectivity products, the board of directors of the company, in today's meeting, has approved an investment of INR 215 crores for the expansion of the manufacturing base for advanced data center connectivity products, including miniature multi-fiber and super high-density multi-fiber termination assemblies. Let me now turn to another exciting opportunity before us, defense and aerospace. Over the last several years, while continuing our leadership in optical connectivity, we have simultaneously invested in building a differentiated defense business. These investments have been guided by a long-term vision because indigenous development of defense technologies requires sustained research and development, product qualification, customer validation, and advanced manufacturing before meaningful commercialization begins. We consciously focus on building indigenous technologies, strengthening engineering capabilities, and creating specialized manufacturing infrastructures to position HFCL for long-term participation in this strategically important sector. Today, we are beginning to see the benefits of these investments. The business has developed a healthy product pipeline, customer engagements have expanded considerably, and we are witnessing increased interest across both domestic and international markets. The proposed acquisition of the aerostructure business will expand HFCL's participation in the global aerospace value chain, opening doors for many more such opportunities in the segment. We expect this business to generate meaningful order inflows, creating another important revenue stream for the company. The addressable opportunity before us continues to grow. India is witnessing one of the largest defense modernization programs in its history, supported by increasing CapEx, accelerated indigenization, import substitution, and the government's continued emphasis on [Non-English content]. At the same time, increasing geopolitical uncertainties have led many countries to strengthen defense preparedness and diversify sourcing strategies. This is creating attractive opportunities for companies with indigenous capabilities and with globally competitive technologies. Today, HFCL's defense portfolio spans surveillance radars of different variants, electronic fuses, thermal imaging solutions, ammunitions, tactical cables, aerospace structures with proposed acquisitions, and several next-generation technologies currently under development. Collectively, these businesses provide us with a strong foundation for sustainable long-term growth. At the beginning of the financial year, we had shared our aspiration of achieving approximately INR 500 crore of revenue in different sectors during FY 2027. Based on the current execution pipeline, customer engagements, and order visibility, we remain firmly on track to achieve this objective. One of the important milestones during the quarter was the groundbreaking ceremony of our upcoming ammunition manufacturing complex in Andhra Pradesh, held on 15th May 2026. We were honored that this landmark event was graced by the Honorable Raksha Mantri of India and the Honorable Chief Minister of Andhra Pradesh, reflecting the strategic importance of the project and its alignment with the government's vision of strengthening India's indigenous defense manufacturing ecosystem. The complex is being developed to manufacture advanced ammunition systems, including electronic fuses, multi-mode hand grenades, and other specialized products designed to meet the evolving requirements of the Indian Armed Forces and global customers. We believe this investment will create significant opportunities for HFCL for years to come. Products such as these demonstrate the growing maturity of HFCL's research and development capabilities. These reflect our ability to develop differentiated technologies that solve complex operational challenges while reducing dependence on imported systems. We believe these products will continue to strengthen our competitive positioning in both domestic and international markets. Our long-term aspiration is to build a defense and aerospace business, which over the coming years has the potential to become nearly comparable in scale of HFCL's current overall business. Given the opportunities before us, the capabilities we have developed, and the policy support for indigenous defense manufacturing, we remain confident that this business will emerge as one of the most important pillars of HFCL's future growth. As HFCL continues to evolve in a diversified technology enterprise, we are equally focused on ensuring that our organizational structure and capital allocation framework remain aligned with the scale and complexity of our businesses. As communicated earlier, our board had constituted a restructuring committee to evaluate strategic alternatives aimed at simplifying the group structure, enhancing operational efficiency, and unlocking long-term shareholder value. We are actively evaluating various alternatives, and to support this process, we have appointed Ernst & Young as our strategic advisor. The objective of this exercise is clear: to ensure that our organizational structure evolves in line with the transformation of our business portfolio by enabling each business to realize its full growth potential. While it would not be appropriate to comment on specific outcomes at this stage, I would like to assure our shareholders that every decision will be guided by three fundamental principles: creating long-term shareholder value, strengthening operational effectiveness, and preserving financial discipline. We'll continue to keep all the stakeholders appropriately informed as this process progresses. Friends, let me now quickly take you through the consolidated financial performance of Q1 FY 2027. Revenue for Q1 FY 2027 stood at INR 1,914.98 crores as compared to INR 871.02 crores in Q1 of FY 2026 and INR 1,824.12 crores in Q4 of FY 2026. EBITDA for Q1 FY 2027 stood at INR 445.27 crore as compared to INR 42.93 crores in Q1 of FY 2026. That is a more than tenfold jump, and INR 336.93 crores in Q4 FY 2026. EBITDA margin in Q1 FY 2027 stood at 23.25% as compared to 4.93% in Q1 FY 2026 and 18.47% for Q4 FY 2026. Profit after tax for Q1 FY 2027 stood at INR 245.64 crores as compared to a loss of INR 29.30 crores in Q1 of FY 2026 and a profit of INR 184.45 crores in Q4 of FY 2026. The margin in Q1 FY 2027 stood at 12.83% as compared to negative 3.36% in Q1 of FY 2026 and 10.11% in Q4 of FY 2026. Segment revenue from telecom products stood at 85% of total revenue in Q1 2026/2027, as compared to 62% in Q1 of FY 2026 and 85% in Q4 of FY 2026. Export revenue stood at INR 1,063 crores in Q1 of FY 2027 as compared to only INR 210 crores in Q1 of FY 2026 and INR 1,212 crores in Q4 of FY 2026. During the quarter, the company delivered healthy growth in revenue while continuing to improve profitability. I'm particularly encouraged by the improvement in the quality of our earnings. The increasing contribution from technology-led products, exports, and value-added solutions, together with disciplined execution of favorable industry dynamics, is enabling us to build a stronger and more resilient business. Going forward, our priorities remain clear. We'll continue to strengthen our global leadership in optical connectivity. We'll continue to scale our defense and aerospace business into a major growth platform. We'll continue to invest in innovation, advanced technologies, and differentiated products. We'll continue to deepen our relationship with customers across India and global markets. Above all, we will remain committed to disciplined execution, prudent capital allocation, and sustained value creation. Friends, on behalf of the board and the entire management team, I would like to sincerely thank our customers, employees, business partners, and shareholders for their continued trust and confidence. Your support inspires us continuously to raise our own benchmark and strive for excellence in everything we do. Thank you once again for joining us today. We'll now be happy to take your questions. Thank you. We will now begin the question- and -answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Aman Saifi with Stallion Asset. Please go ahead. Hi, sir. I hope I'm audible. Yeah. You're very much audible, Aman. Yeah. Thank you so much for the opportunity, Mr. Nahata, and congrats on a great set of numbers. Sir, I just wanted to understand; we have recently announced an investment of INR 215 crores, and we are already doing a preform CapEx as well. What would be our total CapEx for this year and next year? Well, total CapEx of this year and next year, I can tell you. This year's total CapEx is INR 640 crores, which includes part of the preform. The three towers, which we are adding, are increasing the manufacturing capacity of fiber from 24 million-30 million fiber kilometers. 28. Sorry, 28 - 32. 34. 34 million fiber kilometers. IBR lines, which have already been ordered and are under delivery, INR 60 crores. In our subsidiary, the data connectivity business, is INR 65 crores. In the defense sector, INR 100 crores. Today what I announced was INR 215 crores, out of which INR 100 crores will be spent this year. The total will be INR 640 crores. Next year will be about INR 615 crores, out of which INR 325 crores will go to preform and INR 175 crores to defense, and the INR 115 crores balance of INR 215 crores will be in data center connectivity solutions. That would be INR 615 crores. Got it, sir. That's great. Sir, my second question would be, as you mentioned, that this year you are targeting around INR 500 crores of defense execution. When I see, sir, our telecom product business, our revenues on a sequential basis are holding up really nice. If I just annualize that number, our annualized revenue comes to around INR 9,300 crores. That's a significant revenue growth versus what you are guiding to as 40%. I'm just trying to understand, when you're having such a large tailwind, why you're being so conservative. Look, I've not gone into this calculation of INR 9,000 crore or so. I can tell you one thing. We had talked of 20% growth in revenue in the last call. Looking at the business potential and all that. Now I say we'll grow at 40%. It is always good to be conservative, no? If I promise you one and give you two, you will be happy. If I promise you two and give you one, you are unhappy. That's great, sir. Yeah, sir. That's it from my side. All the best, sir. Thank you. The next question comes from the line of Bala Subramaniam with Arihant Capital. Please go ahead. Good evening, sir. Thank you so much for the opportunity. Congratulations, sir. Good set of numbers. I think we have really done well. Sir, first question, what is that global scenario on the pricing side, especially in data centers and our telecom side? I think we have varieties of products like premium side, more than 1,700 fiber counts, and we have 3,500. We have 6,900 counts. I'm trying to understand what the pricing level is for higher fiber count cables and surplus cables compared to standard 432-fiber cables for the telecom product side. I think in the international market, we have seen a higher realization compared to the domestic market. I think recently we have gotten one of the biggest export orders for data centers, for hyperscalers. Could you talk about overall scenarios and, earlier, the pricing range anywhere from INR 1,200 to INR 1,300 per fiber kilometer? What is the current trend on that pricing side? If you're talking about 40% growth, whether if you could quantify how much we can expect on that realization side and how much we can expect on the volume growth side? Bala Subramaniam, you have asked so many questions in one question that it's difficult to remember also what you asked. Anyway, the fiber realization price depends on various things. There's no standard. For telcos, the fiber is a different kind, G.657.A1 fiber with 250 microns. For data centers, it is G.657. A2 fiber with 200 microns or even less. Price differs significantly. A range I can give you. Its range could be starting from $18 per fiber kilometer to $28 per fiber kilometer. It all depends upon the fiber count, the kind of fiber size, and the kind of fiber. All depends upon so many things, but I can only give you a range. There's no particular number I can tell you that is the number. Range, you can say from $18 - $28. What is the international market right now? International market side—that's what I'm saying. It depends on who is buying, what kind of fiber he's buying, and how many counts of fiber he's buying. This is all very dynamic, whether they're long-term orders or short-term orders. There's no particular fixed price I can tell you. Yes, in the international market, you can take little data centers if you're talking about it; you can take somewhere between $22 - $28, depending again upon what kind of numbers and what kind of quantities and all that. Telcos could be a little lower because they are a different kind of fiber. There's no fixed thing as such. This all varies with type of fiber, quantity, longevity, the long-term contract, and all those kinds of different things. Certainly, prices have gone up quite a bit significantly in the last six months. Got it. Sir, second question. On the project side, like I think earlier. Sorry to interrupt, Bala Subramaniam; you're not audible. Could you please come closer to your microphone? Sir, on the project side, earlier call, it was mentioned about the army project that things will realize from Q2. I think we can expect INR 170 crore ASC revenue from that front. We are on the track, sir? Yes. We are on track. From Q2, it should be possible. It is in the final stage. I think another month, it should happen. Okay. We can expect the large contribution from Q2 onwards. Yes. I would say Q2, middle Q2. Yeah, something like that, or maybe a few days here. These are the government things. Things can always change by the month. Yes, sometime middle of Q2, you can say. Okay. Sir, my last question is on the margin side. In the last three quarters, we have been maintaining nearly a 30% kind of margin for the telecom product side. Right now, we are in that 80%-85% kind of mix; should we assume the same kind of mix the entire year, and what is the sustainability of these margins over the next two to three years? Yes. I think these are sustainable because we know our raw material prices and we know our sales prices because they are long-term contracts. I think the margins are sustainable. Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Kush Tandon with Ananta Capital. Please go ahead. Thank you. Sir, good evening. Congratulations on significantly better-than-expected results. Sir, couple of questions that I had. The first one was, Sir, in this quarter, were there any higher-margin orders? You are saying margins are sustainable at these levels, but the quarter's performance—is it sustainable going ahead, sir? Was there any one time large aggregation of an order that is not sustainable in the next quarter, or anything like that? Mr. Kush, first let me ask you a question. You said that margins are better than expected. What did you expect? Sir, it won't be fair on my part to answer that question, but significantly better than at least my expectations. Okay. I was joking. Just joking. As far as the margins are concerned, these are sustainable. There is nothing called a particular high-value or high-margin order that we have executed. These are the average prices on the orders, which should continue possibly throughout the year. There is no kink up and down in any of these margins. It is totally sustainable. Okay. Sir, let's say you take a three-year view on the business, with a super cycle in the optical fiber for the data center business, sir, how are you seeing a three-year outlook, if I may just ask, on the pricing environment and the supply-demand environment? Look, I will give you a five-year outlook. Why three years? Three years is a bonus. Even five years is no bonus. Contracts are now getting signed for 10 years. You would have heard that Molex had a contract which is given for 10 years. five-year outlook, as far as I can understand, there is absolutely no. There is not going to be any net upstream demand. Demand is going to increase. I'll give you the reason for that. Okay. Right now, if you see, most of the expansion is taking place in North America. You compare India as an example. India's total capacity is, I think, 1.5 GW. In three years, we are expecting it to become 3GW. The U.S.'s current capacity is about 150GW, and in three years it is expected to be 300GW. In Europe, the situation is similar to India's: very low growth. Southeast Asia and the Middle East have very low growth. Now growth is starting to pick up. The Middle East at the moment is a different kind of environment. I would not venture into that, but minus that, they are picking up the data center's construction. India is picking up the data center construction. Europe has to pick up. They cannot be far behind U.S. They can be behind, but can't be far behind U.S. The market for data center creation is going to go up and up, and the kind of data flow that is required is a massive amount of data flow. Fiber optics is the only solution. There is no other solution in the world available today. Demand of fiber optic cable is going to increase only. The U.S. will have a huge amount of demand, and for the places where data center construction has now started to reach the level of buying fiber, they will take a one -year or two-year kind of timeframe. The demand will continue for at least five years and maybe more than that. For five years, I can see a clear view that demand is not going to go down. Sir, if you can give a view on supply also, especially Chinese supply, which may not be going to the U.S. immediately, but, sir, in a five-year horizon, whenever there is a large supply-demand gap, probably then suppliers also catch up, sir. Any view on the supplies? Look, you asked a question about China. Right now, as you know, the U.S. is the largest market. Now in the U.S., one, they don't prefer China. I don't think there is an administrative order not to buy from China, but there is administrative advice that administration is not in favor of buying from China. I was with one of the customers, whom I will not name, in the U.S. a few weeks ago, and when we talked about the Chinese, they said, Look, our administration is not in favor of buying Chinese fiber. And these are the major hyperscalers. Now, the question is, what would happen if China increased capacity? One is unwillingness to buy from China and then high duty on China. Today, there is a 35% duty on Chinese fiber. Anything you import from China in U.S. In any case, the competitiveness of Chinese fiber goes down when you compare it with ours because of this higher amount of duty; 10% is now 35%. Supply, yes, would increase, but demand would also increase as you can see it. Another sector of demand that has come from the defense industry is fiber optic drones. Today, there is a demand of almost 70-100 million fiber kilometers of fiber for the A2 type of fiber for fiber-optic drones. This demand is going to increase because till now, only those countries are buying fiber for the fiber-optic drones that are in war. Now, slowly, every country is realizing that radio-controlled drones are not good. They can be controlled by jamming their frequency or using such different methodologies. People are using optical drones. Drones are the new fighting machines, as you know. No longer guns and all that, artillery and all that. Drones are becoming increasingly popular. Every country is now preparing for fiber optic drones. There is a huge new demand opportunity that has come up there. Supply is going to increase. China, I would not worry much as far as the U.S. market is concerned, which is a major market at this point in time. Southeast Asia, yes, China would dominate, but in the Middle East and Europe, we have always been competing with China in the telecom market, and we will continue to do so for the data center market also. Our capacities are also now big enough, world-class capacities. It's not that we don't have economies of scale. We do have economies of scale, and we will be able to compete. Okay. Sir, is the cost of production in India and the cost of production in China with the duty significantly cheaper than procuring from India? No, I don't procure anything from China. No, sir. Not you, sir, your customers. Today, U.S., for example, many of them don't even consider procuring from China. Forget about prices. Okay. Today, China is not cheaper that much, I can say. Even if somebody wants to procure, it's not cheaper. Okay. I don't procure— If I can jus— I'm sorry to interrupt, Kush. I would request you to rejoin the queue for more questions. Thank you. The next question comes from the line of Riken with Capri Global. Please go ahead. Hi, sir. Thank you so much for the opportunity and congrats. Great set of results. Sir, I have two questions. First, could you help understand both of the contracts that you have won on the optical network side? Are these fixed-price in nature, or what kind of mechanism is it, because your orders are like three-year, four-year kind of orders? What kind of pricing mechanisms do they have? In one of your comments, you did touch upon the fact that on the raw material side also, we have kind of fixed contracts. If you could elaborate a little bit in terms of the kind of inflation that you are seeing in the raw materials and whether that could have any impact on our margin performance. Most of the long-term contracts, either raw material or the sales, have a variation clause on a yearly basis. Yearly basis prices are rediscussed. In between, if there are large variations, then that will also be discussed. If there are large variations, which I don't anticipate. If the yearly reset of the prices is always there, then depending on the market situation, there are also reset clauses. That opportunity has still not come because these contracts are not even a year old. I cannot say whether the sales contract would have any reset or not. Yes, there was a reset in between when the U.S. imposed a 50% duty. At some point in time, there was a reset. Customers paid a large part of their duty, and the good thing is that their duty has been refunded, and we have paid them back. Right. Got it. In terms of both on the supply side, I mean, the raw material side, or on the demand side, it would not lead to any major impact on our margins; that is the reading that I'm taking from here. There will be some form of pass-through. I tell you, it's both sides. Yeah. Sales price will increase if the raw material price increases significantly. Significantly, I'm using the word. If there's a 5% increase, the customer is not going to increase 5%. It's not a moving thing. If there's a significant increase, then we go back to the customer. If there's a significant decrease, the customer comes back to us. The 50% example I gave you. When there was a 50% duty imposition, now I could not take a 50% duty. Customers helped me, and they were very helpful. When the duty has been refunded, we have paid them back. Got it. That is very clear, sir. The second question that I have is on the new pillars of growth that you alluded to, which is the defense and aerospace business. If you could give us some kind of visibility in terms of any product approvals that have been achieved in the defense business. Second, in the aerospace business, by, let's say, FY 2028 or 2029, and the defense business, what kind of execution or top line do you think that we would be able to achieve in each of these businesses? In 2028/2029, I think, this is 2026/2027. 2027, 2028. 2028/2029 in our defense and aerospace business, we should be crossing INR 3,000 crore at least. The year next to that, our target is INR 5,000 crore. In 2028/2029, we should be INR +3,000 crore because we are right now having, including one of the acquisitions that we have signed and which is in the process of getting completed, an acquisition process in an advanced stage. Including that, we will definitely cross INR 3,000 crore. In that we are in negotiation for larger contracts for export also. Currently, the order book for export is roughly about INR 2,200 crore. We have been shortlisted for a major contract for modernization of BMP-2, and we have submitted the modernized sample also. I would like to say that, but it's a fact that in the internal trials, our equipment has been found to be the best. What we have modernized. Again, that is the internal trial, not the army trial. The army trial has started from the 20th. That trial should be completed in one and a half months. The winter trial and then the order. It takes time, but I'm quite hopeful about that. Aerospace orders, land system orders—I believe that we should, in three years ' time, have given to myself INR 5,000 crore. Got it. This year at least we should see order inflow starting to come through in a meaningful way for both these segments? Yes. I agree with you in a meaningful way. For our indigenously designed products, what we have done, different kind of radars and sensors, we have integrated with our C2 system, command and control system, and we are going to give a demonstration to the army northern command sometime in the month of September as an integrated system. Moreover, you must have heard of the Home Ministry's listing for securing the borders bordering Pakistan and Bangladesh through a border protection system. There also are the products that are designed and are going to be of quite significant use. There also, they are talking of a PoC, Proof of Concept. There, also, we will be working with them to work on a Proof of Concept, which BSF is organizing. Okay. All these places, we expect a reasonable amount of orders to come to us. Got it. Just one last question— Sorry to interrupt, Riken. I would request you to rejoin the queue. Thank you. The next question comes from the line of Sanjay Shah with KSA Securities Private Limited. Please go ahead. Good evening, sir. Nahata, first of all, highly congratulations, and your tone of confidence in your opening remarks was excellent. The way you have been putting in so many efforts for the last so many years is now coming to show, and we are very well-placed. My question was more regarding the optical fiber cable market, which is projected to reach around $21 billion by 2033 because of this growth driven by hyperscale data centers and surging bandwidth demands of artificial intelligence. What we see is that there are many international players from Italy and Japan and all who are increasing capacity, like Prysmian and Corning and all. How we look at HFCL on that side after this capacity, which may come up, because Prysmian is spending around $1.5 billion to double their capacity. What is your thought process on that, which can help us a lot to understand the growth path? Sanjay, first of all, thank you very much for your compliment. Look, we are also increasing our capacity. We are also world-class players. We started with eight million kilometers of fiber capacity. Today, we are going to be 34 million very soon. Cable, we started with something like 10, 12 million. I'm talking of these recent years, not old days. The old days were much less. Today, we are going to be 45 million strong. In the last two or three years, every month we have been increasing capacity. I don't think that this 34 million kilometer fiber or 45 million kilometers of cable is the end of it. We are constantly reviewing that. As we receive more orders, as we receive more demand, and as we receive more inquiries from customers, we are constantly reviewing that. Maybe we will have to further increase capacity. I'm not denying that. I'm not saying that we will; this is under constant review, and if necessary, we will also increase the capacity. No doubt that we are receiving a large number of inquiries at this point in time. As I talk, we really do not know whom to say yes or whom to say no. I really tell you. If I say yes to one, I have to say no to the other one. That has become the situation. We are really keeping a very close watch, and maybe in the near future, we may have to decide to increase our capacities further, which I'm not saying we have decided, but we may have to. That's great, sir. How about the pricing? Because all this capacity comes up when there could be a flood of supply. Is that true, what I understand? Look, flood of supply, I tell you one thing. There are two major issues out here. One, technology. The data center operators are not buying normal fiber optic cables. For example, they are buying 7,000 fiber cables. How many of fiber optic cable suppliers have that kind of number of fiber cables Only a very few, a handful. In India, we have 20 suppliers for fiber optic cable. There are only two who can manufacture this kind of cable. My other friend may say that I do not, but I do. There are only two. 18 do not have it. If you look at that kind of number, there will be only very few people who have that kind of capability to develop and supply those kind of products. You have further changes in technology also coming up. Technology is not going to remain constant. For example, multi-core fiber, hollow-core fiber, all these are coming up. We are developing hollow-core fiber. There are how many people in the world who are developing hollow-core fiber? This is also a question of technology, number one. Number two, a reputation in the market. Look, I am, and not I, but a number of other people also, connected with the hyperscalers who are already supplying to them. We will have a long-term relationship with those guys. We have signed a five-year contract. When more demand comes up, naturally, they are not going to be changing their suppliers unnecessarily just because demand has gone down. Maybe they buy less from us at that point in time. As I said, I don't expect demand to go down for the next five years, at least. Capacities are not going to be matching the increase in demand. Demand is still going to outstrip the capacity for five years, at least, I can say. Sir, on the technology side, can we take HFCL at par with the global players? Yes, absolutely. 7,000 fiber cables we have already developed. We are now developing 14,000 fiber cables. Maybe there is a difference of two, three months here. That can always happen, but not more than that. Hollow-core fiber, yes, Corning has already done a higher amount of work in hollow-core fiber than others, but we are also doing it. By the time hollow-core fiber becomes somewhat commercial, it is right now thousands of dollars per kilometer. It's not even worth considering. By the time it becomes somewhat commercial in any quantity, we would also be coming up with the hollow-core fiber. We are already in the development phase with IIT Delhi for hollow-core fiber. IIT Delhi and one of the government organizations in Kolkata, which already has a tower for manufacturing a hollow-core kind of fiber. We are already working on that. We are staying at the forefront of technology. Another point: unless we're in the forefront of technology, we'll not be receiving a billion-dollar contract kind of thing, either for the cable or for connectivity solutions. We recently received a contract worth how many? INR 500 crore. Another thing I must tell you: the connectivity solution has also emerged as a very large market. It's not small. It is going to be almost near about as big as the Åland cable market. You need as many connectivity solutions also, and those are more value-added products. Because you buy connectors, you cut into pieces, you connect them, and you send them, which is all a manual process. There is a higher value addition. It is also a very high potential market. What your company is doing, I am increasing my capacity for connectivity products by 5x. In less than a year's time, or let's say in a year's time, progressively, my capacity will be five times more than what it is today, because that's a major market that is emerging now, whose size is going to be very, very big, a market worth billions of dollars. Because if you need data, if you have a data center, you need connectivity solutions. What else we have done, not only cable or cable routes and all that, we are also developing-- rather, developed all kind of products for active connectivity solutions, plastic boxes, cassettes, jointing boxes, and all that. We can be a one-stop shop for all connectivity solutions for a data center, cable, and all other products. The plastic trays and the cassettes and all that that are required inside data centers—we will be a one-stop shop. It's going to be an entire set of connectivity solutions. That is another leap we have taken in this business. Thank you. The next question comes from the line of Manik Mahajan with Balyasny Asset Management. Please go ahead. Hi. Thank you, sir. Thank you for the opportunity. Congrats on the good set of numbers. The first thing I wanted to understand was, with respect to your comment on the margin and the margin guidance of 20%, you mentioned that for the telecom— Sir, your voice is indistinct. Can you just be near the microphone and say that again? Sure. Can you hear me now better? Yeah. Okay. I was saying that with respect to your comment around the margins, you mentioned that the margin on the telecom business would be sustainable at 30%. When I think about the overall guidance of 20%, is there any seasonality we need to take into account because this quarter you've already done about 23% of the data margins? Your voice is a bit echoing. Just let me— Okay. Give me a moment. Let me try to— Your voice is lot of echo, so it doesn't come out very— Is it better now? Yeah. Say that again now. Yeah, Mr. Manik, go ahead. Manik. From a margin perspective. Yes. Can you hear me? Manik, you're not audible. Sir, your voice is echoing, so your voice is particularly kind of echoing. It is not good. Yeah. Say that again. Try again. Thank you. I'm saying that with respect to the margin, if you can share whether we should expect some seasonality from a contract perspective, because you've already done 23% and your guidance was 20% for the full year. Asking that, will there be any seasonality in telecom margin, or is it sustainable? You are saying, Is there any seasonality in telecom margins, or are they sustainable? Is that the question? Because your full-year guidance is 20% and this quarter you have already done 23%. Yeah. I'm trying to understand why the full-year guidance is lower than your quarterly guidance. I understand. There's no seasonality. The reason being, as I said in one of the previous questions answered, is that this 23% margin is out of the normal average contract, which we are executing and which we would be executing throughout the year. These are the average contracts, which more or less would remain the same throughout the year. There's no seasonality at all. Seasonality is not there. This 23% margin is something minimum we would be able to protect, to the best of my information at this point in time, out of the orders I have and the raw material costs I have. But if some geopolitical situation happens and something changes, which is not in my control or your control, some people close the Suez Canal and deliveries become delayed, and any such thing happens, which I cannot control, I cannot say. Whatever is in control of a business is this: There will be no problem. Got it. That's helpful. Just one more follow-up with respect to the Preform project: how does it alter the company's overall return profile and/or the margin profile? the Preform project would mean I think you asked about the Preform, isn't it? Yes, that's right. The Preform project is designed for the two perspectives. One, bring in more sustainability in the raw material supply chain, because we would need a lot of Preform, and that lot of Preform, some parts should we be able to manufacture. That is one part of it: it would bring in more sustainability in the supply chain. Number two, the make-versus-buy analysis when you make. Make it at least, I would say, 30% cheaper as of today. Now, the situation might change five years down the road; I don't know. But as of today, make is 30% cheaper than buying. Raw material cost would go down for the preform to that percentage. In a fiber, 70% of the cost is the preform, so 65%-70%, you would say. Fiber cost would go down by 18%-20%. When you go to cable, fiber constitutes about 60%. Of the total cost, roughly about 45% you would say is Preform. In total, there would be a 10% saving in the raw material cost, something like 10%-12%. Thank you. The next question comes from the line of Nikhil Purohit with Fidentii Asset Management. Please go ahead. Hi, sir. Thanks for the opportunity, and congrats on another great set of numbers. Firstly, we had some unbilled revenues at the end of quarter four FY 2026, expected this to be billed in quarter one. What is the update on this? It has been billed. It is billed. The major amount of INR 300 crore, which has been billed. Okay, great. We had also said that the INR 1.1 billion order that we got from a hyperscaler would only start execution from the end of quarter one FY 2027. My question is, do we expect to sustain this kind of revenue of INR 1,900 crore that we've seen in this quarter in the coming quarters? Because H2 is generally a stronger half, or is it possible to see a quarter-on-quarter decline? No, there is not going to be a quarter-on-quarter decline. 5% or 10% here and there; it's very difficult to predict. Generally, we should be able to maintain roughly this kind of revenue. Profitability, I would say, also does not decline. Profitability will also remain, to the best of my estimate. We will not be inferior to this. Better; how much I cannot say. We will not be inferior to this, in my opinion. Thank you. The next question comes from the line of Khushi Soni with Nuvama Institutional Equities. Please go ahead. Hello, sir. Congratulations on a great set of numbers. My question was regarding the order book that we currently have. Could you throw some light on how much of this pertains to the defense part and how much would be from the optical-fiber cables? Look, optical fiber cable is roughly about INR 16,000 crore. Defense part, including the acquisition that we have proposed. If I take that into account, then it would be roughly about what is not included in this INR 2,600. Let me tell you. Sorry. It's not included in this INR 26,000 crore; I would take it as my order because that acquisition is already in the final stage of completion. If I take that into account, then the order book would be something like INR 2,300 crore or so. Without that, it would be about something like INR 300 crore or so. One should take that into account, because that acquisition is almost done. All right. Out of this INR 2,600 crore, if I understand correctly, currently only INR 300 crore of defense order is included. Additional acquisition is over and above that. INR 1,000 crore. INR 1,000 crores. All right. If you could help me with what kind of revenue breakup in the telecom segment we see with OFC and the data center solutions that HFCL has been providing. Look, the data center solution business, Khushi, we started only this year. This is the first year of data center business. First year, I think Q1 would have been about INR 100 crores or so, I think. Something like INR 100 crores, maybe a little bit here and there. For the full year, we are looking at an INR 800 crores number, roughly about an INR 800 crores number. This is the first year of data center connectivity business. As I said a little while ago, I am increasing this capacity by 5x. 5x. I don't want to multiply this INR 800 number by five times for that. There is going to be a significant increase in data center revenue in time to come. This is the first year of data center connectivity business. You must understand that. Still, we are going to get about INR 800 crores of revenue from that business. We already have almost INR +850 crore orders in our hand, and we are receiving more orders for that. Capacity is being expanded by 5x. All right. Thank you, sir. Just one last clarification. Sorry to interrupt, Khushi. I would request you to rejoin the queue. Thank you. The next question comes from the line of Jigar Shah with Nuvama Institutional Equities. Please go ahead. Yeah. Hi. Thanks for taking my question. Congratulations, sir, on a very good set of numbers. I had two questions. First, on your segmental assets, I could see about INR 1,000 crore increase on the telecom side of products on the asset side. What is this capitalization related to compared to Q4 FY 2026? Just a second. It is aligned with whatever main CapEx we are doing or the incremental revenue we are having. The asset increase— No. Fixed asset base or— No, not a fixed asset base. The overall asset— Are you talking about current assets plus fixed assets or only fixed assets? Overall asset he's talking about. No. The segmental assets that you disclosed, which is telecom products and defense products. That has gone from about INR 3,978 crore in Q4 to about INR 5,000 crore. There is INR 1,000 crore addition. I believe our CapEx would be still to come online, the expansion, or part of it is online already, the fiber cable expansion. The fiber cable expansion is already happening. Preform has not yet started. The fiber and cable expansion is already happening. Just let me see the numbers. It includes all the assets, whatever CapEx we are incurring or the receivable side, the inventory side, because everything is being built on the incremental revenue now, and keeping in view the revenue progress on a month-to-month basis. So it is— It includes a mix of all these things. Fixed assets plus working capital. It is all put together, not only fixed asset. Okay. It's receivables also, which might have gone up basically. Plus— Inventory, receivables. Inventory, receivables. It's a mixture of all. Okay. Understood, sir. Sir, secondly, on the EPC project, you had guided that we will be profitable this year. One second, sir. One second. The net increase is just INR 400 crore. You see that as the segment liabilities also of the telecom product, which have increased by INR 600 crore roughly. The net increase in the telecom asset side is just INR 400 crore. It's not INR 1,000 crore. It's a net increase in INR 400 crore. Okay. Understood, sir. Sir, on the EPC side, the profitability we were guiding for profitability in FY 2027. Is that still on track, that for FY 2027 on the EPC side, we will see some profitability this year or break even? On the EPC side, one of the major downsides was this army warranty period where we were supporting the army network without getting anything. Which we expect to be signed in the Q2, which I earlier said is on track. It will be signed in Q2. Post signing of that, revenue from EPC would increase and loss would significantly come down. I don't say that there will not be any loss, but there may be some. There may be some, but there may not be also. Right now it's too early to predict, but it will significantly come down, no doubt about that. Thank you. The next question comes from the line of Tej Patel with Nivesha. Please go ahead. Hello, sir. Am I audible? Yeah. Sure, Mr. Tej. Thank you. Thank you so much for the opportunity and congratulations on a very good set of numbers. Sir, my question is again related to margins. I understand, sir; probably at least for the, let's say, the upcoming six months up till December, we 'll probably be able to maintain these margins. My question is, let's say, once our preform cost revises at the start of the next calendar year, how would we be able to maintain the current margins given, let's say, our older contracts were at a very lower price, maybe, let's say, lower than the current market price of the preforms? Once this preform contract is revised to a newer price, how would we be able to maintain margins after Q3 of this year? Look, some preform contracts are long-term, which are going to be surviving beyond this financial year and maybe almost towards the end of this coming financial year. We have taken adequate steps to not let the preform price for the most of our quantity increase any significantly because we will be manufacturing our own preforms also. There would not be any serious impact on the profitability. There may be a couple of percentage here, there, and that would be offset by the increase in the prices from the customers. With the kind of demand we have, I don't find any reason why the customer price will not increase. Then number two, connectivity solutions, where the profitability margins are a little better because they have got much more value addition from the cable; then you can cut it, connect it, price it, and then ship it. All that would be balancing each other. Overall margin profile would still remain the same. Understood. Sir, if you could help quantify some, when you say some, what part of contract or how much of the contract is extended to the next financial year as well? Well, I will not be able to go into that much detail. These are some NDAs and company confidential. Yes, as I said, the margin profile will not go down because of better price realization from the customers, better value-added products, and quite a significant part of the preform price not increasing, and whatever increase there is will be offset by the more value-added products and better price realization. overall margin would not be impacted. That is what I'm particularly telling you. Thank you. The next question comes from the line of Tushar Tonde with Sangli Family Office. Please go ahead. Hi, Mahendra Nahata. Yeah. Yes, yes. First of all, congratulations, sir, on a good delivery in this quarter. My first question was regarding the hyperscaler contract that we have. Is it regarding the supply of optical fiber cable A, a data center interconnectivity product as well, or a mix of both? If it is regarding only optical fiber cable, do we see any complementary demand coming for the data center interconnectivity products as well for the same contract? Has the execution of the contract started, as you said it might start from the end of Q1 of 2027 in the last quarter? Look, we have both orders, but separate orders for cable and separate orders for data center connectivity solutions. A single order does not have both. They're different orders. Different orders from different customers are there, which are cable and data center connectivity solutions both. More data center connectivity solution orders as well as cable orders are expected from different hyperscalers. Not one, but different hyperscalers. We are negotiating with a number of them. Maybe under a month's time or maybe less than that, we may have more orders coming up. It is for both, to answer your question. The delivery for both cables is going to start probably from now. Yes, this month it should start. Connectivity may be a month later. Okay. My next question was regarding the defense revenue aspiration; I guess in the opening remarks you said we will be doing INR 500 crores of revenue in this particular year. Is that correct? Sir, wait just a second. I was answering your question, and you started in between. No. Data center, you asked for a particular contract, and I said, Yes. We will start a particular kind of a miniature solution, which we should call MMC, from the next month or so. Otherwise, MPO cables and all that; delivery has already commenced. That is already on. That's what we said. We made about INR 100 crore in revenue in the first quarter, and for overall year revenue, we expect around INR 800 crore. Yeah, next question. Yeah. My next question was regarding the defense vertical. In the opening comments, you mentioned that we will be doing INR 500 crore of revenue in the defense vertical. Did I hear that right? Yeah, you heard it right. Absolutely right. Is it including the acquisition that we'll be doing or— Yes. You are right, absolutely. When do we expect the acquisition to be complete? Within this calendar year. Can we expect the consolidation to happen from the 4Q? Yeah. Okay. Yes. Okay. Thank you. Thank you and all the best for your future. Thank you. The next question comes from the line of Vrushabh Vasa with Instinc Securities. Please go ahead. Hi, sir. First of all, congratulations on the good set of results. My question is on the data center connectivity total addressable market. You are targeting. What is the target date when it comes to the new MMC and the SNMT facility? You have stated that 2.7 lakh assemblies per annum. What kind of global spend on this product category are you underwriting? What share do you expect to capture? Sure. Another question is on the concentration of the private book, order book, which is around INR 16,000 crores. What is the expected timeline for the entire INR 26,000 crore order book? How many years will it be taking in order to complete this order? What is the schedule for FY 2027? These INR 26,000 crore orders have various orders of various kinds. There are fiber optic cable orders, which are five-year contracts. There are BharatNet-kind of contracts; these are three-year contracts. O&M O&M contracts are seven-year contracts. We have different contracts. Out of INR 26,000 crores, I would say INR 22,000 crores or so would be within a five-year period. Yeah, that is as per other participants. Yeah. We should be INR +22,000 crores would be within five years period. Yeah. It should all be executed within five years; more orders are always being received. As we execute, we receive more orders. That is our INR 26,000 crore, an all-time high order book for us. It's an all-time high order book. This quarter has been an all-time high in orders, an all-time high in EBITDA, an all-time high in revenue, an all-time high in PBT, and an all-time high in PAT. This is what I would like to mention again. INR 16,000 crore, which you mentioned just now. Yeah, INR 16,000 crore you just mentioned just now. Yes, sir. There is an order for fiber optic cable; it again varies from three months to four years, kind of a contract. It will be executed accordingly. Okay. Thank you, sir. Thank you. The next question comes from the line of Satya, an individual investor. Please go ahead. [Non-English content] Nahata. Congratulations on the all-time best quarter; thank you so much for a great performance. I had a couple of questions. One is on the spot price of the optical fiber cable side. How is the trend generally? I know overall we are getting very high prices, but still that momentum is continuing. Are we still getting great and better prices on the spot side? Are they falling, or are you seeing the growth continue? No, spot prices are not falling at this moment. Spot prices could be a little better. Remember one thing: there's nothing called spot. There's no fiber optic cable, which is standard. It is always made to specs. Everybody needs a different kind of spec, most of them. Any spot would also be four to six months. Anyway, that kind of spot price would have some better pricing, some 5%, 10%, or 15%, depending upon the buyer, and would have better pricing than a five-year contract. 15%-20% better. Right. Got it. Sir, second question on the capacity side, the capacity expansion that we have been doing, what is the status of the IBR optic fiber cable capacity, and what is the timeline status of that? Secondly, sir, we are developing the high-density fiber cable. Where are we on that? What are the timelines on that? Just wanted to get a sense of those. As far as IBR is concerned, we already have a capacity of roughly about 14 million fiber kilometers, as much as I remember. 12 machines are there, 14 million fiber kilometers, and which is being expanded every month. Every month expansion is happening. Its expansion is every month's business. This capacity will keep on increasing. What was your second question? Density fiber cables, I know we had 9,000 and 14,000. With those numbers, we are developing those cables. Where are we on the timelines for that? When do we expect them to commercialize? No. What do you mean by density commercialization? Sir, we had 7,000 fibers in a cable. Already we are selling. For the U.S. market, approval is under process. Some other markets we have started selling in. Right. Sir, what about 14,000? Under development, it will take another two to three months. Right. Got it. Thank you so much. The next question comes from the line of Darshil Jhaveri with Crown Capital. Please go ahead. Thanks, sir. Firstly, congratulations on a great set of results. I think great is also an understatement for your results this quarter, sir. Hope that this continues. Sir, I just wanted to understand from the debt side perspective how we see that increasing with such a high level of growth we are doing. Can you comment a bit on the level of debt you want and the working capital cycles? How would that be, sir? Look, the debt-equity ratio is very reasonable at the moment; it's 0.3. There cannot be any more comfortable debt equity ratio than that. Yes, sir. It is likely to remain in this range only. It's not going to increase further than that. Yeah. Yes. No, just that because we'll be doing a lot of CapEx, right, sir? In terms of cash flow generation, how should we look at it? There will be internal generation also. Paid as. Part of that will be kept on being paid as well, because every month we are paying. So finally, the ratio would remain around 0.3 only. Okay, sir. The ratio will remain around 0.3. Right, Sir, I just wanted to understand, due to monsoons, can this Q2 quarter have a slight decline, or how do we just see that, Sir, as Q2? Total revenue, most of the revenue is from fiber optic cable, and that too is from exports. Exports: The U.S. doesn't have monsoons, so don't worry. Okay, sir. Quarter-on-quarter, we can see the same run rate going on, sir. More or less. 10% here and there, I would not say anything about, but more or less the same. As I said in the beginning of my statement, earlier we had talked about 20% growth in revenue in the whole year. Now we are saying that, compared to last year, to the best of our knowledge and estimate, we are saying that the growth will be 40%, not 20%. Thank you. The next question comes from the line of Dhruv Bajaj with GrowthSphere Ventures. Please go ahead. Sir, thank you so much for giving me this opportunity. Congratulations on an amazing set of results, sir, especially on the optical fiber cable front. I think we are exceeding the expectation that everyone had set up for our business. Sir, I had some questions regarding the defense piece, especially the restructuring part. Based on our understanding, so we have transferred the entire defense vertical into HFCL Advanced Systems, correct? Hello? No. It's not the entirety. Ammunition business, electronic fuses are still remaining in HFCL. Okay how we would restructure the entire business. Our board is considering that with the consulting from Ernst & Young advising us. Right. We are doing that work at this moment in time; that's how to restructure to the best interests of all the shareholders and all the stakeholders and to maintain profitability or increased profitability and revenue growth. Each sector of the business gives better revenue and better profitability. That's how we are organized. Right. Sir, is it fair to say that the recent acquisitions that we made, like Defsys, Hardel Advanced, and similar other firms, we are spending all business on, where we have some INR 1,900 crores of order books, we have transferred that business into HFCL Advanced Systems, right? Sir— Ammunition will be a new business for us. I think we have not started the production or any sales for that business. That HFCL Advanced Systems, which is a subsidiary of HFCL Advanced Systems. Yeah. Actually, it is transferred into a subsidiary. Sir, the question that is coming from my end is, We have diluted a significant extent of that particular defense business. Now HFCL Limited, wherein we as minority shareholders are invested in HFCL Limited, which also has a 51% stake in that business. Wait. You are not realizing one thing. We have not diluted. We have acquired businesses also. Aerospace business, we were not in. We have acquired that business. With the acquisition of that business, which already has an order book of more than INR 2,000 crore, expect orders of another INR 2,000 crore. It's not a dilution. Dilution with acquisition. Any acquisition you do, you have to have some dilution; you are getting a huge amount of business with that. Thank you. The next question comes from the line of Pritesh Kotadia with Anand Investments Private Limited. Please go ahead. Hi, sir. Congrats for an amazing set of numbers. Also, I would like to thank you for the opportunity you gave for the plant visit, for which I came to Hyderabad on the 12th of June. Did you like it? Yeah, it was a very great experience. Thank you. Yeah. Sir, my question will be regarding preforms. We will set up the manufacturing at which plant for the preform manufacturing? We are in the process of deciding, and within this month, we will decide on the exact location. We are considering two or three different locations, and one of the locations we will decide on and set up. Okay. What will be the cost, I mean, CapEx for that? Right now, the board has approved INR 580 crores. Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to one question. Any more questions? Ask two questions, please. I'll give you better interaction. For the rest of the questions, people can interact with our IR, investor relations head, Mr. Amit Agarwal. The last two gentlemen 's questions, I can take. Yes, sir. The next question comes from the line of Ravi Mehta with Wana. Please go ahead. Hi. Thanks for the opportunity. Just one question was on the telecom product revenue. What's the total, apart from cable and fiber, the product sales that happen, what was that, and how are you seeing that revenue panning out? I believe the data center connectivity piece is within that. I just wanted to understand a little bit on that side. A data center is part of an optical fiber cable. These are unlicensed band radios, routers, and Wi-Fi systems. These are the products that are contributing to that particular revenue. That is also being clubbed within the— Telecom. Telecom product. Yes. What is that quantum in this quarter, and where do you see that revenue going? This revenue in the whole full year, we are looking at INR 500-600 crores on an overall basis, and it will probably contribute 10% or even less than that of the total revenue. Okay. Is it margin dilutive or accretive? No, it is margin accretive, but it does not have very high margins. The EBITDA margins could be something like 15%-16%. 15%? I would say 12%-15%, not 15%. 12%-15%. Thank you. The next question comes from the line of Meet Katrodiya with Nivesha. Please go ahead. Yes, thank you so much for the opportunity. Sir, my question is, this quarter 50% of our revenue was from exports, right? Within export, can you please provide a breakup that is 100% cables for data center, or if there is something that we are also shipping from telecom Also, sir, if you can throw some light on the margin differential between IBR cable and normal flat loose cable, that would be great. The last question is something I cannot answer because it's really confidential how much margin you get on which kind of cable. As far as your first question. Okay. I think export revenue, I would rather say, should remain around 60% or so; 40% would be for local revenue on an overall basis because the defense revenue mostly would be local. There will be some revenue from local data centers and telecom for the fiber optic cable. Overall telecom revenue is all local. On an overall basis, you should say roughly about 60/40, 65/35, that kind of range. Got it, sir. Sir, one question on Preform that you are very much confident on is the EBITDA margin and also next quarter as well. Let's say we must be doing a negotiation with our supplier, right? How much of a price increase are they asking for, and are you also talking similarly with our customer to pass on this price? I'm just not understanding why you are so confident on these margins. Confident because some of the contracts are long-term contracts, as I said. Some of the contracts are not so long-term, but at the same point in time, there is some margin. Overall, with some increase in the price of Preform, they will be compensated by two factors. One, better pricing from the customers and also the more value-added products like data center products, which we have created. Those are more value-added products; they have better profitability. Somewhat better profitability. Overall profitability, in spite of the increase in the preform prices, is not going to be impacted, as I've said multiple times, and I am again saying that. Thank you. Ladies and gentlemen, we will take that as the last question for today. Investors may connect with Mr. Amit Agarwal, the Head of IR, for any further clarifications. I would now like to hand the conference over to the management of HFCL for the closing remarks. Well, ladies and gentlemen, it was really a very nice interaction with all of you. I really compliment the very nice questions asked by all of you, patiently hearing my presentation and my answers. I hope I have been able to reply to all your queries to your satisfaction. Still, if you have more queries, you can ask our IR team, led by Amit Agarwal; we will be very glad to answer. If I receive any query, I will be very glad to answer. Yes, gentlemen, as I said in the beginning of my presentation, the company is on a good progress path. We have delivered numbers that, to date in the history of the company, are the highest in terms of revenue and profitability. Order book also: we have an INR 26,000 crore order book, which itself tells you the sustainability of the business of the company. The fiber optic cable business is on a growth path. We are increasing capacities, and we are constantly reviewing the demand. Increased demand may need more increase in capacity, which we do if required. Data center connectivity business: we have started this year, and this year itself, we would be reaching about INR 800 crore in the revenue. We're increasing the capacity of connectivity solutions by five times, including our subsidiary, HTL. It would be a significant part of revenue because it's a value-added product. To a large extent, it will offset any increase in the raw material prices, if at all. It may affect profitability. Margins are not going to decline in the current year unless there is some geopolitical situation that is out of my control. For example, the Suez Canal closes or something else happens, which is not in my control. Otherwise, from the company's business perspective, the revenue growth that we had talked about was 20%, which we are now saying that to the back of our expectations, it will be 40% growth in the revenue. Profitability, which we said would increase by 2%-3% from the 16%-17% last year, has already grown; instead of 20%, we have reached 23%. We expect this to continue in the next quarters also. Ladies and gentlemen, with all your blessings and all your support, the company has done well, and we assure you that we will continue to do well. Thank you very much. We are ready to answer any further queries you have, which you may write by email to our IR head, Mr. Amit Agarwal. Thank you very much to all of you. Thank you, sir. Ladies and gentlemen, on behalf of Nuvama Institutional Equities, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.